How much does a divorce cost?

15 May 2018
by
National Bank

A divorce can have serious emotional consequences. It can also have a
serious financial impact that you may not have planned for. The cost
of divorce proceedings varies from one couple to another as there are
multiple things to consider. Here’s how you can estimate the cost of
your divorce to avoid any unwanted financial surprises.

Amicable divorce: The cheaper option

An amicable, or uncontested, divorce, is “an application for divorce
based on a draft agreement, that can reduce some of the delays and
legal fees involved in divorce proceedings” (Justice Quebec, 2018).
Spouses agree on the grounds and terms (for example, child support
payments) and complete the necessary documents. Then, a judge
certifies the agreement, settling all aspects and consequences of the
separation, eliminating the need to go to court.

Amicable divorce is generally the cheaper option. According to
Canadian Lawyer Magazine’s 2015 survey, the average divorce lawyer’s
fees nationwide were $1,845 for this type of divorce. For Ontario, the
average fees were $1,217.

The cost for court proceedings, however, depends on the province
where you live. In Quebec, court fees to obtain a divorce total $413.
The initial application for divorce is $302, plus an additional $101
for the joint application, plus another $10 federal registration fee
payable to the Central Registry of Divorce Proceedings. In Ontario,
court fees total $447. The first payment of $167 is due when the
application is filed, which includes court fees of $157 and $10
collected for the federal Department of Justice. Additional court fees
of $280 are then paid before the divorce is reviewed by the court.

Contested divorce: Fighting is expensive!

In contrast to an amicable divorce, a contested divorce is where
parties cannot agree, either about getting divorced or about the terms
(such as the division of assets, allocation of debts, alimony, child
support, or the custody of children.) A contested divorce is also much
more expensive; the average cost rises to $13,638 nationwide and
$8,747 for Ontario (Canadian Lawyer Magazine, 2015).

The more complex and contentious the divorce, the longer it takes. As
Sylvie Schirm, an attorney in family law, explains, “The lawyers have
to draft the proceedings, determine the alimony, calculate the assets
and debts, divvy up the property, etc.” Family law legal
proceedings can cost up $18,706 for one or two days and $35,950 for
five days.

Quick divorce: Joint application

Some lawyers offer online divorce proceeding packages. Depending on
your family situation and chosen options, you can expect to spend
between $500 and $1,700 for these services.

According to Schirm, this can be a good option for simple cases (no
children, no debts, etc.), but the proceedings are highly standardized
with limited support—some packages don’t even include a meeting with a
lawyer. Legal professionals, however, emphasize that each case is
unique, and in an agreement, it’s often the details that make all the
difference. This is where a legal professional’s expertise can really
be a factor. While the use of a lawyer or notary may be recommended,
parties are under no obligation to use one when filing a joint application.

Legal professionals: Fees

Lawyers: If you choose to uses a lawyer, keep in mind that
their fees are in addition to the legal costs in your province. In
Quebec, the median hourly rate for a lawyer is between $184 and $331
while in Ontario rates can range from $219 for a lawyer called to the
bar to $438 for 20-year calls.

Notaries: In Quebec, as of February 21, 2017, an amicable
divorce can be done through a notary. Like with a lawyer, notary fees
are in addition to legal costs and depend on the couple’s family
situation and the number of meetings and modifications required. In
Ontario, notaries do not have the capacity to handle amicable
divorces. Ontario residents should consult a lawyer instead.

Bailiffs: Lawyers will generally use a bailiff to serve
documents. The tariff of fees and transportation expenses are
generally set by the province. In Quebec, for example, provincial law
dictates fees of $0.63 and $0.86 per kilometre travelled,
respectively. In Ontario, for up to three attempts to serve a
document, whether or not successful, the fee is $100 for each person
being served.

Experts: The cost of an expert’s services ranges from $2,000 to
$15,000. There are a number of reasons you might consider an expert;
for example, as Schirm explains, “You can hire a psychologist for a
contested custody battle, following accusations of violence or drug use.”

Long-term financial consequences

Getting a divorce can lead to a lower combined income and the
possible payment of alimony and/or compensatory allowance. When you
separate your shared taxable household income, you individually pay
more taxes. Each spouse assumes new expenses and potentially faces
additional debts.

In the longer term, you also have to consider the rules governing the
family patrimony in your province, as they apply to your retirement.
An example of this is pension sharing.

How do you cut costs?

Conciliation is the way to go

The best way to keep a failed marriage from turning into a financial
disaster is to agree in advance on as many points as possible
regarding divorce and its consequences. You should quickly identify
areas where you disagree and be open to negotiation once the process
is underway.

With a focus on cooperation, family mediation can help you avoid
litigation and lessen the financial burden of a divorce. Provinces
have programs in place to assist in this area. For example, in Quebec,
when a couple has at least one dependent child, the Ministère de la Justice du Québec provides five
hours of free mediation with a certified family mediator. Provincial
courts also offer a free psychosocial expertise service. In Ontario, there are no fees for mediation
through Legal Aid Ontario, however, you must be financially eligible
to qualify. In the case you don’t qualify, Legal Aid Ontario can help
connect you with other free or sliding scale, court-based mediators.

Legal aid

In the case of a contested divorce, a low-income spouse may be
eligible for provincial legal aid and receive free (or inexpensive)
legal counsel. Consult with your province’s Legal Aid department to
see if you qualify.

Tax optimization

It is important to keep certain funds separate from your personal and
family property, such as life insurance or inheritance money. These
items are likely to be excluded from the list of assets divided
between ex-spouses.

When it comes to childcare expenses or legal fees incurred to obtain
child support, a parent can claim a tax deduction. As France Bourgie,
a tax consultant at Fiscalité Cible points out, “Try to agree with
your ex-spouse to have your taxes done by the same person to maximize
your credits and refunds.”

Marriage contracts

A marriage or civil union contract, commonly referred to as a
prenuptial agreement in the U.S., can establish, in advance, the terms
of dividing possessions in the event of a divorce. Such agreements
also specify the net worth and gross value of the possessions owned by
each party at the time of marriage. Oftentimes, it is much simpler to
plan and discuss these things when all is going well between
spouses—to avoid potential problems arising down the road.

Making the right decision

Divorce can be a long and expensive process. Avoid taking the
consequences of this decision lightly and be sure to seek professional
help before things get complicated.

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